ISLAMABAD, Jun 02 (Alliance News): The federal budget for 2025-26 proposes significant changes in taxation and development spending.
Taxes on bank deposits and savings schemes are set to increase, with the withholding tax on cash withdrawals by non-filers expected to rise from 0.6 percent to 1.2 percent. Additionally, new taxes may apply to daily cash withdrawals exceeding Rs 50,000.
The budget also suggests raising sales tax on vehicles under 800cc and increasing GST on locally manufactured cars from 12.5 percent to 18 percent.
A new levy on petrol- and diesel-run vehicles is proposed, along with higher taxes on capital gains and profits. However, a reduction in the super tax rate is under consideration.
On the development front, the government plans to allocate Rs 1,000 billion for projects in the coming fiscal year. Provincial governments will spend Rs 609 billion more than the current year, with the federal government borrowing Rs 270 billion from abroad to fund development.
Provinces are also expected to borrow Rs 802 billion externally. Punjab plans to spend Rs 1,190 billion, Sindh Rs 887 billion, Khyber Pakhtunkhwa Rs 440 billion, and Balochistan Rs 280 billion on development initiatives.
The economic growth target is set at 4.2 percent for 2025-26, up from 3.6 percent this year.
